Neometals Limited has muscled its way back into the upstream critical minerals game, locking in a 51 per cent controlling stake in a lithium and potash brine play in the Paradox Basin in Utah, USA.
Under a binding investment agreement with its US partner Omaha Value Inc, Neometals’ subsidiary Neometals Energy will hold 51 per cent of Utah Brine Corporation – a special purpose subsidiary established by Omaha Value to evaluate the “Utah Brine Project” in the Lisbon Valley area.
The drawcard is a capital-light pathway into a basin with abundant oilfield infrastructure and historical data. Utah Brine has secured exclusive access and a user licence with licensors American Helium LLC and UK-based Ascent Resources to 24 inactive oil and gas wells, along with associated leases, pipelines, corridors and geological information.
The full package gives Neometals and its 49 per cent joint venture (JV) partner, Omaha, the rights to access wells, collect and test brine samples for lithium and potassium, run hydrogeological and metallurgical programs and – if the numbers stack up – potentially extract, process, transport and re-inject brines.
Neometals’ ticket to control comes with a commitment to fund up to US$2 million in project costs over three years as the JV works its way through staged evaluation milestones ahead of a permitting decision point.
Neometals Limited managing director Chris Reed said: “The acquisition of a majority interest in Utah Brine Corporation, together with exclusive access to established wells and data infrastructure in the Paradox Basin, represents a strategically attractive and low cost entry point for Neometals to evaluate a new lithium-potash brine development opportunity in the United States.”
The company sees the initiative as supporting its long-term strategy of using its lithium and battery materials expertise to build exposure to high-quality critical minerals projects in Tier-1 jurisdictions.
Omaha will fund the separate US$1.9 million permitting fee payment due upon receipt of the key approvals for commercial lithium and/or potash production.
There is also an annual US$200,000 access fee payable under the licence once conditions are satisfied, and a gross smelter return royalty payable to the licensors at 2.5 per cent to 3.5 per cent of sales from lithium and potassium products produced from brines extracted within the covered acreage.
Importantly, Neometals says no mineral resources or ore reserves have yet been estimated and any move beyond evaluation will hinge on further sampling, test work, permitting and funding.
Next up, the joint venture plans to set an exploration target, then roll into bulk sampling and metallurgical test work – including a direct lithium extraction focus – before a broader well-sampling program aimed at supporting a mineral resource estimate and engineering studies.
If the Paradox Basin brines deliver on chemistry and flow, Neometals is an old hand on lithium resources and processing know-how through its patented ELi technology. That experience could come in extremely handy as the US hunts for domestic supplies of critical minerals.
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By Doug Bright
